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Eleventh Circuit: Inventory Computation Exclusion Bars Alabama Employee Theft Claim

In February, we reported on an Alabama federal court decision that barred an insured from recovering for employee theft where the only evidence of shortage was a comparison between computer records and a physical inventory conducted after the malefactor had been discharged.  On August 6th, a unanimous panel of the Eleventh Circuit affirmed in W.L. Petrey Wholesale Co. v. Great Amer. Ins. Co., 2015 U.S. App. LEXIS 13738, 2015 WL 4646599 (11th Cir., Aug. 6, 2015).  The judges held that the policy’s inventory computation exclusion was unambiguous and that inventory computation evidence was only admissible to prove the amount of loss after the existence of loss had been shown by other means. As we noted earlier this year, the insured

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Posted in Conditions, Exclusions, Theft or Dishonesty

Inventory Computation Exclusion Bars Employee Theft Claim in Alabama

Employee theft claims are frequently problematic when the only evidence of shortage is a comparison between computer records and a physical inventory conducted after the malefactor has been discharged.  In W.L. Petrey Wholesale Co. v. Great American Ins. Co., 2015 WL 404523, 2015 U.S. Dist. LEXIS 10943 (N.D.Ala., Jan. 30, 2015), an Alabama federal court recently granted summary judgment to the carrier where the contract of insurance barred employee dishonesty claims based solely on “inventory computation” and such a comparison was the policyholder’s only evidence of the loss. Petrey was a wholesale distributor of goods supplied to convenience stores, one of which was a two ounce “energy shot” drink called “5-Hour Energy.”  It hired salespeople for delivery routes, and each

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Posted in Conditions, Exclusions, Theft or Dishonesty
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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